twacowfca

Follow your star. :)

Yes. Without embellishment, 500 hours is way on the low side over time for me when unusual value resides in a business, sometimes by a degree of magnitude for a very interesting company. :) What would a ballpark estimate be for you for an insurance company? And does your industry expertise play into that number if you start a looking at a new company? Actually, Some companies don't take a lot of time to understand if one has a good grasp of the drivers of value, For example, Leucadia. They have a great record of spotting a bargain that gives them a margin of safety. Their new CEO not only understands this, but has been one of their feeders over the years. Now that he's running the show, guess who's going to get first pickings of what their investment banking side sniffs out. They've got a young CEO who's been there done that, highly ethical, shareholder focused, plus still guidance from one of the founders. Oh, by the way, they're still selling for about book value. That doesn't take a lot of analysis. Sometimes lots of extra study might not improve understanding. On the other hand, when I like and own a company, I enjoy following them closely. :) the extra study does stiffen the backbone to stay with a good company if they hit a rough patch or to decline to flip a company merely because their share price went up The extra study also greatly helps understand when to sell an otherwise good company that is a major position. For example, several years ago we had a large position in a company that was in Cpt 11 much like Ted did at the same time with WR Grace. We sold out some as it approached fair value and the remainder as it passed fair value when it came out of Cpt 11. Our edge was the understanding of the company and the industry and the legal environment that we gained after long study showed that a great company in a cyclical industry was headed for a big recession if not a train wreck. It was ironic that a value investor known for less in depth analysis started buying the stock in a very public way after we had sold out 99% of our position. I complimented him in a public public forum for realizing that they were a great company, but pointed out that they were in a cyclical industry. I left unstated the obvious (to me after long study) fact that they were at the top of the cycle. A year later, we bought that company back during the 2008 crash for 3% of the price of the stock at its peak two years earlier, again because we had gained deep understanding of the company, the industry and the dynamics of ownership and support suggesting they would survive the recession. That confidence to act appropriately in changing circumstances was gained only with long study. :) A similar deep understanding after long study has guided our very profitable round trips in the Fannie and Freddie preferreds in the last few years. :)

That right there, is your margin of safety. ;D Yes! You have made a simple but profound observation. :)

Yes. Without embellishment, 500 hours is way on the low side over time for me when unusual value resides in a business, sometimes by a degree of magnitude for a very interesting company. :)

Whatever success we've had I owe to my wife who knows how to pinch pennies till they squeak. :)

Here's the background. During WWII, Khrushchev was In charge of suppressing dissent in Ukraine. This he accomplished by killing millions of people and reinforcing the Soviet government there. When Stalin died, Khrushchev propped up the shaky government of that republic by giving Crimea to the Ukraine, even though it had belonged to Russia for 100 years. The recent pro Russian government of Ukraine that was recently ousted was an unprecedented cleptocracy even by Russian standards, stealing alike from Ukrainians and even Russian buddies of Putin. The last straw was the Ukraine's revolt, raining on Putin and Russia's Olympics extravaganza that had been carefully planned by Putin to show how modern Russia has become, financed by Oligarchs who are on his team. The taking back of the Crimea and the impending takeover of Ukraine is payback to the Ukrainians for spoiling Putin's party (and Russia's party too). With 80% approval rating at home, Putin now has a green light from the Obama administration that has publicly announced that they won't do anything to dissuade Putin from taking his revenge other than making self righteous noises. When Russia sends forces into the Ukraine, don't be surprised if Israel seizes an opportunity to do something about Iran's nukes. This is the way big wars start. One day war is far from everyone's mind. The next day it happens.

That makes sense. Where, when did you hear or read about that? He met Ed Thorp in Orange County just as he was starting his hedge fund in the late 60's after being introduced by one of Ben Graham's relatives. Warren then expressed approval of Thorp's convertible arbitrage strategy. Evidently, Warren also voted with his dollars. :)

A big hat tip to all the 1 percenters^ And all the higher percenters too. :)

Yup! You hit the nail in the head. It's all about a great experience and maintaining and reinforcing that culture. It was only a few years ago that some thought Starbucks was losing their way. Harold Schultz came out of the back seat into the driver's seat and got them straightened out. The leaders of all great companies that deal with the public have to keep preaching the core values or things will slip. Starbucks is no exception to that rule .

Yes. Join the A team. :)

You made a very good investment !

That counts double !

Many thanks !

Way to go!

high five!

Good for you TWACFA and ONYX - that's real leadership. You got my 1% today. Good for you. +1 Who's next?

Twacowfca, as usual your timing is perfect! Sanjeev, count me in for another $5k as a donation to the COBAF board to be used as you see fit. I will hand you a check at the annual dinner. It's a small amount compared to the value of this board but I hope it eases some of the burden. Good show! See you there. :)

Normally we make contributions anonymously, but today we're making a $5K contribution openly toward the costs of maintaining the COBAF message board. Let me challenge some of those who are impatient for improvements to make a contribution of at least 1% of that amount before expressing disapproval. Thank you.

I agree. Sanjeev has done a great job, with regular improvements in the site. The next improvement I would like to see is better search within COBAFMB. I'm kind of the go to guy on the LRE thread, and most of the questions posed have been discussed earlier in the thread. Therefore the answers are often redundant. Rather than being repetitious, it would be nice to be able to refer people back to those discussions within particular threads. However, the internal search feature seems to lack features of advanced search and the results seem to reflect an exact match of spelling and words that typically fails to retrieve important information. I suppose it might be possible to export an entire thread to something like a document where an advanced search feature could be used. Would this be possible, and if so would it be cumbersome?

I think this lawsuit is more about scaring people with insider knowledge not to blog about it and maybe also finding these leaks. Yup. A statistician friend who does algorithmic modeling and trading mistakenly infringed their intellectual property rights to the name, Greenlight, in a similar LOB. Naturally , he got a strong cease and desist letter from Greenlight's lawyer. I advised him not to lawyer up, but to simply send them a letter agreeing to change the name. That was satisfactory, and the matter was resolved without legal action One has to object when there is something amiss or a company can lose intellectual property rights or other standing in the legal system.

The B shares have a tailwind to trade at a premium to the A shares because they have more liquidity, but the provision whereby a A share can be converted to 1500 B shares opposes that. When the price of 1500 B shares rises above the value of the A share, the difference can be arbitraged by buying an A share while simultaneously shorting 1500 B shares. Then the A share can be converted into 1500 B shares to cover the short position a few days later.

Guerin was down so much because he was levered. Munger was also levered at times, but he may not have been as subject to margin calls as others because he was a member of the Pacific Stock Exchange. BRK didn't have to mark it's portfolio to market, and the portfolio recovered substantially by the end of 1974. 1973 1974 was a perfect storm of negative factors.

VXX is good as volatility goes up dramatically when there is the smell of panic on the wind and people pay up for near dated protection.. It's also nice because movement in the VIX leads what's going to happen to the VXX when people get scared. Thus, one can tell when it's time to get in the VXX or out of it. Otherwise, the VXX will eat your lunch 95% of the time that you are long I loved the XXV and successors when it first came out before they advanced up to the limits. It didn't have the frictional costs of many other such funds. It certainly saved a lot of time reading the tape daily to decide when to buy back the short positions on the index as they got near dated. If the market gets very ugly, you are almost certain to make a lot of money shorting the VXX as it peaks near the levels it reached in 2008 and 2009. All you have to do is hold on until the VXX mean reverts. That's easier said than done. Most sure things are pretty simple, but surprisingly difficult to execute. :)

+1. Let the discussion continue on whether it makes sense to hedge or not but it sure feels nice to have no impact on your portfolio when the markets go down 2%+, especially when you are at that time trekking in northern thailand's jungle! :d It sure feels good when you timed it right... the thing is how often you timed it right. If one has the ability on timing (some do), there is much better way to make money than doing "hedges" I give him credit. He timed it perfectly and he had a reason...WSBASE...he called it on the way up too. you are very kind. However, there is a big difference in predicting a major turn in the market and making money on that prediction. Our hedge is tricky. I don't have the guts to in effect go short with TRS as Watsa did because of the huge adverse movement if the market against all reason continues to go up. We started out in mid January with slightly OTM Feb SPY puts. These waffled back and forth mostly under water until the last few days of Jan. Today, we closed out the last of these with a nice gain. In the meantime, we have been rolling about two thirds of these gains farther out on the volatility curve, buying March and then April SPY and IWM puts that are longer dated and a little bit farther out of the money than the February puts when we first bought them. We also took some $$ off the table so that if the market is sluggish to decline or pops back up, we won't lose money on the hedge. Now, if the market goes down fast or a lot, the greater volatility exposure will give us an extra kick. :)

Bought OTM puts on IWM early today to add to the pile of SPY puts we own. Nice pop with the IWM puts up about 65% at the close. Have been rolling some of the ITM SPY puts into longer duration OTM puts. It's definitely nice to have an increasing store of potential dry powder in this decline. It remains to be seen if, in the immortal words of George W. Bush, "This sucker's going down." :)